U.S Federal Reserve (FED) interest rate decision

The U.S. Federal Reserve's Federal Open Market Committee (FOMC) will announce whether the interest rates in the U.S. will increase or remain unchanged tonight at 20:00 South African time.

The FOMC Statement:

The Federal Open Market Committee (FOMC) statement is used to communicate with investors about monetary policy. It also contains the outcome on the vote on interest rates, the economic outlook and most importantly offers clues on the outcome of future rate decisions.

-> A more dovish than expected statement could be taken as bearish for the Dollar (USD)

-> A more hawkish than expected statement could be taken as bullish for the Dollar (USD).

Market Consensus: 

The consensus in the market is that the interest rate will remain unchanged this time around at 1.75% but two additional increases in the U.S. interest rate are expected sometime this year.

Trading Strategies:

The decision will be watched closely by traders as an increase in interest rates will be very positive (bullish) for the Dollar (USD) so take a look at the following:

Major Forex pairs:

• EUR/USD
• GBP/USD
• USD/JPY
• USD/MXN
• USD/ZAR

And the inverse is applicable where there is an an increase in interest rates then that will have a  negative effect on equities so take a look at the following:

Major Indices:

• S&P 500
• Wall Street 30
• Nasdaq
• Russell 2000

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